Symmetric information bubbles: Experimental evidence

Yasushi Asako (), Yukihiko Funaki (), Kozo Ueda and Nobuyuki Uto

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: This study experimentally analyses traders’choices, with and without asymmetric information, based on the riding-bubble model. While asymmetric information has been necessary to explain a bubble in past theoretical models, our experiments show that traders have an incentive to hold a bubble asset for longer, thereby expanding the bubble in a market with symmetric, rather than asymmetric information. This finding implies a possibility that information symmetry promotes cooperation. However, when traders are more experienced, the size of the bubble decreases, in which case bubbles do not arise, even with symmetric information.

Keywords: riding bubbles; crashes; asymmetric information; experiment; clock game (search for similar items in EconPapers)
JEL-codes: C72 D82 D84 E58 G12 G18 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2017-01
New Economics Papers: this item is included in nep-exp, nep-gth, nep-mac and nep-ore
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https://cama.crawford.anu.edu.au/sites/default/fil ... _funaki_ueda_uto.pdf (application/pdf)

Related works:
Journal Article: (A)symmetric information bubbles: Experimental evidence (2020)
Working Paper: (A)symmetric Information Bubbles: Experimental Evidence (2019)
Working Paper: (A)symmetric Information Bubbles: Experimental Evidence (2017)
Working Paper: Symmetric Information Bubbles: Experimental Evidence (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2017-05

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